Regulatory Inconsistencies Resulting in Expropriatory Measures: The Duty of the State to Warn, or Duty of Investor to be Aware?
Abstract
Regulatory inconsistencies of the host state, often based on the widely or vaguely construed rules, giving a way to expansive interpretation of the investor’s actions as misconduct. This allows for the regulator to impose expropriatory measures as a remedy to an alleged misconduct, distancing from responsibility for misapplication of the rule behind the ambivalent legal framework. The key question with regard to the considered problem, is whether its a state duty to inform, or investor’s duty to be aware of all possible consequences, pursuant to the principle of 'prudent investor'. Complexity of the issue necessitates to tackle the problem in multifaceted way, with application of the complex of Fair and Equitable Treatment (FET) standard constituents, as transparency, legitimate expectations, requirements for consistent, stable and predictable framework.